Multiple Choice
Which of the following statements correctly identifies the problem with regulating a natural monopoly?
A) It is difficult to identify a natural monopoly.
B) If a natural monopoly lowers its prices,it will have to shut down to cut losses.
C) The real cost of serving the market will be higher if there is more than one firm.
D) The cost of regulating a natural monopoly is lower than the welfare cost.
Correct Answer:
Verified
Correct Answer:
Verified
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